Portland General Electric’s data center customers will pay more for electricity under landmark law

The Oregon Public Utility Commission (PUC) has issued an order under the state's POWER Act, mandating that data centers and other large industrial power users served by Portland General Electric (PGE) will pay increased electricity rates. This move aims to protect residential and small business customers from rising utility bills driven by explosive data center growth, as confirmed by PGE spokesperson Ben Morris, impacting 16 data centers. Oregon PUC Chair Letha Tawney stated the new rate structure ensures large energy users pay their "fair share" for increased demand on the power grid. The POWER Act, or "Protecting Oregonians With Energy Responsibility," establishes a new customer classification for users exceeding 20 megawatts, requiring them to bear a greater share of electricity costs, including investments in grid expansion and renewable energy. An analysis by the nonprofit Oregon Citizens' Utility Board (CUB) found that data centers, particularly in Hillsboro, contributed to a nearly 50% increase in PGE bills over the last five years, costing PGE $210 million last year due to data center growth. In addition to higher rates, the PUC order imposes renewable energy requirements on new data centers and "exit fees" for projects that halt construction. Aaron Tinjum, Vice President of Energy for the Data Center Coalition, criticized Oregon's approach as "out of step" with other states and potentially detrimental to economic development, despite their commitment to paying full costs. Conversely, Cole Souder, staff attorney at the Green Energy Institute at Lewis and Clark Law School, believes the new regulations will hold data centers accountable for their environmental and financial impacts.